GCC to suffer 10% drop in population under expat exodus
Population in some of the six-nation Gulf Cooperation Council (GCC) countries may decrease by as much as 10% as the impact of the covid-19 pandemic forces their mostly foreign workers to leave the oil-rich nations.
"The dependence of the GCC on expat workers and large swathes of job losses as the lockdown bites into key sectors may result in significant falls in population, which could have longer-lasting implications," Bloomberg said, quoting Oxford Economics, a leader in global forecasting and quantitative analysis.
The Oxford Economics report also said the GCC is in recession as lockdowns to curb the spread of coronavirus and the ramifications of low oil prices hit the non-oil economies. Consequently, employment across the GCC could drop by around 13%, with peak-to-trough job losses of some 900,000 in the UAE, and 1.7 million in Saudi Arabia.
The expatriate exodus is expected to be larger than after the 2008-2009 financial crisis"
Reliance on expat workers in vulnerable sectors means the burden of job losses will fall on the ex-pat population, it mentioned.
Combined with visas depending on employment and lack of a social safety net, an expat exodus is likely to happen as the travel restrictions are eased. This could result in the population decreasing by between 4% (in Saudi Arabia and Oman) and around 10% (in the UAE and Qatar).
While an expat exodus may mean that the GCC "exports" some of the impacts of the recession, it will also have some negative effect on key sectors, such as possible labour shortages as the hospitality sector recovers, an additional drag on property markets, and probable price pressures in certain quarters, the report remarked.
In a May 2020 report by Reuters, it said 35 million foreigners form the Gulf's economic backbone.
"The expatriate exodus is expected to be larger than after the 2008-2009 financial crisis and the 2014-2015 plunge in prices for oil," Reuters said quoting the ILO and the International Monetary Fund (IMF).
However, this expat exodus isn't restricted to the Middle East. Singapore's total population has fallen for the first time in 17 years, as the economic fallout from the coronavirus pandemic saw less foreigners working in the city state.
The overall population dropped by about 18,000 people, or 0.3%, to 5.69 million, largely due to a reduction in foreign employment in the services sector, according to Singapore's annual population report released this week.
Subscribe to International Investment's free, twice-daily, newsletter
